"How To Make Sure Your Dark Money Group's Million-Dollar Donors Stay Secret"

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How To Make Sure Your Dark Money Group's Million-Dollar Donors Stay Secret

by Paul Blumenthal at the Huffington Post

http://www.huffingtonpost.com/2013/12/05/dark-money-donors_n_4386536.html?utm_hp_ref=politics

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WASHINGTON -- "Dark money" nonprofit groups go to endless lengths to ensure that their political activities do not jeopardize their tax-exempt status and thus their ability to keep their donors secret. They navigate the overlapping rules of the Internal Revenue Service and the Federal Election Commission with the advice of lawyers who specialize in stepping up to, but not over, the lines.

Watchdog groups have challenged these legalistic contortions and repeatedly criticized the current IRS rules, which state that social welfare nonprofits -- the most common form taken by groups seeking to participate in politics but hide donors' identities -- must be engaged "primarily" in their social welfare function. A major problem is that the IRS does not clearly define "primarily." While the agency has proposed new rules, they will not go into effect for some time and, in any case, do not address the amount of permissible political activity.

In the meantime, attorneys go on advising dark-money groups with millions in donations how to stay within the bounds of nonprofit law.

At the Fundraise to Win conference hosted by Campaigns & Elections magazine on Nov. 21, Sean Cairncross, a lawyer with HoltzmanVogelJosefiak, revealed some of that advice. HoltzmanVogelJosefiak, a publicity-shy law firm, represents Karl Rove's Crossroads GPS and a host of groups associated with the billionaire Koch brothers, including Americans for Prosperity and the Center to Protect Patient Rights.

Cairncross said dark-money groups that keep their political spending under 40 percent of their annual budget fall within a "safe harbor or the threshold that is considered safe" by IRS enforcement officials.


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